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Living in mom’s basement and paying $400 per month on student loans

In Delinquency: The Untold Story of Student Loan Borrowing by Alisa F. Cunningham and Gregory S Kienzl, Ph.D. (2011), Cunningham and Kienzl note that the borrowers who struggle most to repay their loans, unsurprisingly, are those who failed to graduate, with 33% delinquent without defaulting and 26% defaulting. That’s one in four defaults, an atomic bomb of a credit hit. Those who graduated with a degree defaulted far less often, although schools attended affect that percentage significantly. Graduates of four-year public or private nonprofit schools did better than graduates of for-profit and public two year institutions. A very high proportion of students who enroll at for-profit colleges borrow—almost 88 percent in 2007–08, according to the National Center for Education Statistics (2008).

Our 2-year community colleges remain marvelous resources but the fact is that they admit many students who cannot meet entrance requirements for other, more selective colleges. One by-product of this policy is the higher level of students who require remedial math and English courses, courses that don’t count toward graduation but are simply intended to help an unready student prepare to start college. Several studies have found community college remediation class rates surpassing 50 percent. Less than one-quarter of these students requiring remediation will earn a certificate or degree within eight years. More than half of students who take out loans to enroll in two-year for-profit colleges never finish. (Source: Education Trust)

Without continuing this barrage of depressing numbers, I’d like to observe that the number of college drop-outs is on the rise, and many of these drop-outs are carrying loans like Jacob Marley’s chains, clanking burdens that hamper their moves at every step. These drop-outs often end up unemployed or underemployed, with little prospect of paying off their multi-hundred dollar loan payments in a timely fashion.

We need to stop telling all of our students that they must go to college. I have watched and listened as counselors walked into my bilingual classes to tell students about the necessity of a college education. Ummm… while not wholly inappropriate in all cases, that 17-year-old girl who spoke about 200 words of English? She had zero chance of being ready. About half that class spoke only rudimentary English. That student who got a 17 on his or her ACT test? That student should not be given advice on getting into college. ACT Inc. pegs the college-readiness score at around 21 points. Students who are clearly unready need to receive a realistic picture of their chances for college success, not a speech on how great college will be. Those politicians and counselors selling the college dream won’t be the ones saddled with loans when that dream turns into a multiyear, repayment nightmare.